Iran May Offer Preferential Gas Prices to Friendly Countries

TEHRAN (Tasnim) – Iran may adopt a non-commercial approach in exporting its gas to friendly countries, and give them discounts on exported energy, Iran's ambassador to Armenia Mohammad Reisi announced on Friday.

"The agreement we signed with Armenia some years ago to export natural gas to that country in return for electricity exports is still in place. Despite some changes in the pricing, we will continue to respect the agreement. Iran has a different policy towards friendly countries and may consider a discount mechanism for them, but generally we follow international prices for gas," said Reisis in Yerevan.

According to the bilateral agreement between the two countries, Iran barters one cubic meter of gas for three kilowatt hours of electircity.

“Iran does not need electricity, it is an exporting country in the sphere, and the abovementioned barter deal is a vivid demonstration of Iran’s friendly attitude towards Armenia,” the Ambassador said.

Reisi reminded that Iran’s Oil Minister had declared after talks with the Armenian Energy Minister last month that they were committed to the initial deal on gas.

“Bank transfers are becoming possible after the lifting of sanctions, which is very important. You know that there is an Armenian-Iranian “Mellat” Bank, which the Armenian banks have not cooperated with for a long time now. Meanwhile, we must have an opportunity to make money transfers to implement projects with Armenia.

According to the Iranian ambassador, the construction of the Meghri Hydro Power Plant in Armenia has also been blocked because of banking problems.

Speaking about the prospects of Armenia becoming a transit route for Iranian gas, the Ambassador said, “The matter is still open for further discussions. Armenian infrastructures could make it possible for us to transit our gas through Armenia’s territory.”

Tehran and Yerevan have established growing energy ties during the recent years. Iran has exchanged over 1.5 billion cubic meters of gas with Armenia’s electricity over the past six years.

Last year, Iran bartered some 480 million cubic meters of gas for Armenian electricity, the largest amount of such exchange between Iran and that neighboring country in six years.

The Armenian government is also building a second, bigger highway leading to the Iranian border in the hope of boosting trade with Iran.